[Peak Credit] update

In the backlink I showed the chart of commercial and industrial loans from commercial banks.  That is a multidecade chart so the wave take time to play out.  Back then the total credit there was $1.8 trillion.  Now it is about $1.9 trillion and still sharply rising.  Until this peaks, there is no peak Ponzi and probably no peak in the stock market.  We know that margin money has been slipping out the back door (data from EWI monthly paid subscription) but there are many forms of debt underpinning the global debt Ponzi.  We also know that many of the credit sources are out of phase with each other.  A big collapse will only happen when many of the big sources of debt crash in unison; when their phases align.

In the case of commercial loans we can be fairly sure that we are reaching the peak of a 5th wave of some kind.  In the cases of the red numbering system, it is the peak of an entire motive wave.  In the case of the green, it is the peak of a 3rd wave.   Either way the model predicts a major pullback, one that should be more severe than the 2007-2009 collapse.

Zooming in, this chart is still hard to read because of its smoothness.  For now it is still chugging along at a strong clip and I suspect this will remain the case until interest rates begin to be seen as rising.  In fact, people could be rushing to get loans before rates in fact rise.   If history is any guide, however, when the breakdown occurs it will not be subtle and that is the real value of the 5th wave of the above chart which is shown below: trend line analysis more than wave count.  If we see a sudden vee style peak form and then break the support trend line (not shown but not hard to visualize either), that will be a significant sign of market weakness IMO.  Until then, shorts just have to use EW entry points and to employ tight stops giving the bull market it due credit.  The key is to have capital in hand when this thing blows up.